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No MAT for Indian corporates ,3.5% reduction for one availing incentives/exemptions

No MAT for Indian corporates

There will be no MAT for corporates except one availing some exemption/incentive. In the stimulus package FM has removed/reduced MAT for corporates. It is going to attract big investments. Let us have a look on new MAT rates for corporates. MAT is the minimum alternative tax levied on corporates.  MAT is removed for following corporates. The rate of MAT is reduced for corporates other than below.(See full story)

  1. Domestic company: Tax rate is 22% without any exemption or incentive. This type of corporates will not be liable for any MAT liability.
  2. New manufacturing company: In the case of corporates incorporated after 1st October 2019 making a fresh investment, the tax rate is 15%. The benefit is available to all corporates commence their production on or before 31st March 2023.
  3. A company which does not opt for the concessional tax regime and avails the tax exemption/incentive shall continue to pay tax at the pre-amended rate. However, these companies can opt for the concessional tax regime after expiry of their tax holiday/exemption period. After the exercise of the option they shall be liable to pay tax at the rate of 22% and option once exercised cannot be subsequently withdrawn. Further, in order to provide relief to companies which continue to avail exemptions/incentives, the rate of Minimum Alternate Tax has been reduced from existing 18.5% to 15%.

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